Activation of NF-κB by bacterial LPS promotes the upregulation of proinflammatory cytokines that contribute to the pathogenesis of Gram-negative septic shock. LPS activation of NF-κB is dependent upon the interaction of two death domain–containing (DD-containing) proteins, MyD88 and IL-1 receptor–associated kinase IRAK. Another DD-containing protein, Fas-associated death domain (FADD), also binds MyD88 through respective DD-DD interactions. Although FADD has been classically described as a proapoptotic signaling molecule, several reports have implicated a role for FADD in mediating NF-κB activation. In the present report, we investigated whether FADD could mediate LPS activation of NF-κB. Overexpression of FADD blocked LPS-induced NF-κB activation, whereas absence of FADD enhanced activation of NF-κB by LPS. Further, LPS-induced expression of two NF-κB–dependent gene products, IL-6 and KC, was enhanced in FADD^–/– mouse embryo fibroblasts (MEFs) compared with wild-type. This increase in NF-κB activity correlated with enhanced IκB degradation. FADD^–/– MEFs were also resistant to NF-κB activation induced by IL-1β. Finally, reconstitution of full-length FADD in the FADD^–/– MEFs completely reversed the enhanced activation of NF-κB elicited by either LPS or IL-1β. Together, these data indicate that FADD negatively regulates LPS- and IL-1β–induced NF-κB activation and that this regulation occurs upstream of IκB degradation.